South Korea clamps down on short selling


South Korean regulators imposed on Sunday (5 November) a temporary ban on short selling until June. 

Short selling is a common practice in which an investor bets against the value of a given asset. In most cases, an investor:

  • 🏛️ Borrows shares from a stock broker
  • 💵 Immediately resells them
  • 📉 Waits until the share price drops, and then
  • 🤑 Buys the shares back, returns them to the broker, and pockets the difference (or swallows the loss).

But bigger investors were using an illegal practice in Korea called ‘naked short selling’ to short sell shares without first borrowing them.

And legal or otherwise, regulators say this was all contributing to market volatility and harming everyday (‘retail’) investors. 

Intrigue’s take: Score one for the little guys. South Korea’s benchmark share index rose yesterday (Monday) more than 5% on news of the ban.

But by (again) intervening like this, South Korea risks undercutting its own efforts to boost its appeal as a lucrative, developed market. 

Also worth noting: 

Latest Author Articles
Court forces Panama to shut a key copper mine

Panama’s Supreme Court ruled unanimously (🇵🇦) on Tuesday that the law behind the country’s vast Cobre Panama copper mine was “unconstitutional”.

30 November, 2023
BBC report alleges COP28 host UAE used host status to source oil and gas deals

Documents leaked to the Centre for Climate Reporting suggest UAE officials have sought to leverage their COP28 host country status to push for oil and gas deals, just as the UAE kicks off the COP28 climate talks in Dubai this Thursday.

28 November, 2023
An Israel-Hamas ‘hostages-for-pause’ deal?

Hamas may soon agree to release 50-100 women and children being held as hostages in Gaza, according to Israeli, Qatari, and American officials.

21 November, 2023
You asked: Do big climate conferences work? And if not, what are the alternatives?

The 2015 United Nations Climate Change Conference (COP21) held in Paris was a success. The ‘Paris Agreement’ was remarkable insofar as the participating 196 countries agreed, by consensus, to reduce their carbon output “as soon as possible”.

9 November, 2023